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Since the 1990s, climate change impact discourse has highlighted potential for large scale violent conflicts. However, the role of climate stresses on local conflicts over natural resources, the role of policies and adaptation in these conflicts, and opportunities to enhance cooperation have been neglected. These gaps are addressed in this paper using evidence from participatory action research on 79 cases of local collective action over natural resources that experience conflicts in Bangladesh and Nepal. Climate trends and stresses contributed to just under half of these conflict cases. Nine factors that enable greater cooperation and transformation of conflict are identified. Participatory dialogue and negotiation processes, while not sufficient, changed understanding, attitudes and positions of actors. Many of the communities innovated physical measures to overcome natural resource constraints, underlying conflict, and/or institutional reforms. These changes were informed by improving understanding of resource limitations and indigenous knowledge. Learning networks among community organizations encouraged collective action by sharing successes and creating peer pressure. Incentives for cooperation were important. For example, when community organizations formally permitted excluded traditional resource users to access resources, those actors complied with rules and paid towards management costs. However, elites were able to use policy gaps to capture resources with changed characteristics due to climate change. In most of the cases where conflict persisted, power, policy and institutional barriers prevented community-based organizations from taking up potential adaptations and innovations. Policy frameworks recognizing collective action and supporting flexible innovation in governance and adaptation would enable wider transformation of natural resource conflicts into cooperation.Key policy insights Climate stresses, policy gaps and interventions can all worsen local natural resource conflicts.Sectoral knowledge and technical approaches to adaptation are open to elite capture and can foster conflicts.Many local natural resource conflicts can be resolved but this requires an enabling environment for participatory dialogue, external facilitation, flexible responses to context, and recognition of disadvantaged stakeholder interests.Transforming conflict to greater cooperation mostly involves social and institutional changes, so adaptation policies should focus less on physical works and more on enabling factors such as negotiation, local institutions, knowledge, and incentives.